FTA deal talks premature, says US representative

By Amber chung and Shih Hsiu-chuan / STAFF REPORTERS

Due to its prioritization of concluding the WTO Doha negotiations and engagement in ongoing free trade pact talks, Taiwan's much anticipated Free Trade Agreement (FTA) talks will not be included on the US' agenda in the foreseeable future, a high-ranking US official said yesterday.

"It would be premature to discuss an FTA with Taiwan [for the moment]," Karan Bhatia, Deputy US Trade Representative, said when addressing the American Chamber of Commerce in Taipei yesterday.

A critical priority for the US is a conclusion of the WTO Doha negotiations, Bhatia said.

Also, the US has a number of ongoing FTA negotiations, including recently-launched talks with South Korea and Malaysia, the official added.

"Given the demands that this agenda will place on the Office of the US Trade Representative (USTR) and interagency resources, it will be extremely difficult for us to take on any additional FTA partners during the next year," Bhatia said.

Bhatia visited Taiwan for the fifth round of the Trade and Investment Framework Agreement (TIFA) that began in Taipei on Thursday. TIFA was first established in 1994.

Bhatia is the highest-level US official to visit Taiwan in six years.

Taiwan is the US' eighth largest trading partner with nearly US$57 billion in two-way goods trade last year, according to USTR's figures.

As of 2003, the stock of US foreign direct investment in Taiwan reached US$12.1 billion, the latest data showed. In turn, Taiwan had poured US$3.2 billion in foreign direct investment into the US in 2004, the official said.

Remaining bans on the transfer of commercial technology, imports of certain goods from China, travel to Taiwan by Chinese employees of Taiwanese and international firms, and China-bound investment, as well as a lack of direct air and shipping links, all combined to create uncertainty and a distinctive competitive disadvantage for Taiwan, he said.

Bhatia urged Taiwan to move towards a restriction-free environment, as those bans "discourage multinational companies from establishing operations in Taiwan that are viable only if integrated into regional production and distribution networks."

Earlier yesterday morning when President Chen Shui-bian (陳水扁) received Bhatia at the Presidential Office, Chen told Bhatia that enhancing bilateral economic ties between Taiwan and the US would help to prevent China from isolating Taiwan and encourage China to engage in dialogue with Taiwan.

Chen told Bhatia that either the signing of a US-Taiwan FTA or Closer Economic Partnership (CEP) could have these results.

Chen said there are no political considerations behind Taiwan's goal of becoming an FTA trade partner with the US.

"It is fully based on economic considerations," he said.

Chen said Bhatia's visit to Taiwan was of significance as it meant that US-Taiwan relations had not been unduly influenced by the National Unification Guidelines controversy and the transit spat during his state visit to Latin America earlier this month.

Chen requested that Bhatia send his best regards to US President George W. Bush and reassured Bhatia that he will never renege on his promise to the US and Bush.

Bhatia also met Premier Su Tseng-chang (蘇貞昌) yesterday who called on the US to support Taiwan's efforts to become a member of the WHO and an observer in the OECD, as well as addressing the importance of strengthening economic ties between the two.